Australia should prepare for a major increase in mining investment in the coming years despite recent sharp falls in commodity prices, according to the Reserve Bank.

In the minutes from its September meeting, when the cash rate was left at 3.5 per cent, the RBA board signalled that concerns that Australia's resources boom had peaked or was coming to an end had been overblown.

"If the fall in the iron ore and coking coal prices were to be sustained, it could lead to somewhat lower mining investment," the minutes said.

"But given the large LNG and other mining investment projects already underway, the staff still expect there to be a substantial increase in resource investment over the next year or so."

The RBA's comments come after miners BHP Billiton, Rio Tinto and Fortescue Metals Group shelved projects because of falling commodity prices and slowing demand from China.

They also follow a recent claim by Resources Minister Martin Ferguson that the resources boom was over.

Mr Ferguson and other government ministers later qualified the comment to say the boom in commodity prices had ended.

RBA board members noted Australia's big iron ore producers had achieved "record levels of investment" in the first half of the year and that production was expected to "increase further over the coming year".

The RBA says thermal coal shipments from New South Wales "increased sharply" as new capacity came on line, while temporary factors weighed on exports of coking coal from Queensland.

However, the RBA says Australia's terms of trade could fall if more sustainable growth from China forces a sharp decline in spot prices for iron ore and coking coal.

"If sustained, this decline would imply a larger fall in the terms of trade than earlier forecast, though the terms of trade would still remain high by historical standards," the minutes said.

RBA members also noted the high Australian dollar, its impact on Australian exports and whether it might be overvalued.

"While the Australian dollar depreciated slightly over the past month, it remained near its recent highs, despite significant falls in commodity prices and a weaker outlook for the global economy," the minutes said.

"With the terms of trade still high, models suggest the Australian dollar may have been somewhat overvalued, but not substantially so."

The comments are likely to increase speculation that the Reserve Bank could lower interest rates later this year as a mechanism to lower the dollar, in addition to kick-starting Australia's non-mining economy.

Carbon tax impact

The RBA also provided an update on the impact of the carbon price, which was introduced on July 1 this year.

It says the tax "had not yet had a significant affect on downstream price pressures" and that there were only "isolated examples" of suppliers attributing price increase to the carbon price.

"There was no evidence that the carbon price had raised previous medium-term inflation expectations," the minutes said.

The Reserve Bank has previously said the carbon price could add 0.7 per cent to consumer inflation in its first year.

The board said the current cash rate of 3.5 per cent remained "appropriate" given the "more subdued" international outlook.